Hello Apolaki,
I doubt that the blade produces any really toxic fumes. It's most certainly not arsenic nor zink. (However, it is common sense not to sniff any fumes that smell bad, just to be sure...)
Steel with higher carbon content stains darker.
Hardened steel stains darker than the same steel unhardened, too.
Also, both are corroding faster than mild/unhardened steel.
The current state does not look that bad. In Jaw this would be fully acceptable (except for the splash of fresh rust which should be avoided by quick drying/oiling).
For a Moro kris, the metal surface should preferably be more shiny. It's a fine line between too shiny and no laminations visible and too strong an etch with a dull surface which just needs some experience to achieve. And even experienced folks here will retry the process several times to obtain a better result.
Regards,
Kai
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